SEOUL – South Korea’s business community is bracing for a challenging May, with sentiment remaining pessimistic due to the ongoing Middle East crisis, a recent survey revealed. The Business Survey Index (BSI) for May, compiled by the Federation of Korean Industries (FKI) from the nation’s top 600 companies by sales, registered at 87.5. A reading below 100 indicates that pessimists outnumber optimists, a trend that has persisted for two consecutive months.
Sector-specific data painted a similar picture of caution. The manufacturing sector’s BSI outlook for May stood at 86.5. Within this, the oil refinery and chemical industry reported 89.7, while the automotive and transportation equipment sector posted a more subdued 82.8. The non-manufacturing sector also reflected this concern, with its BSI outlook at 88.4.
The FKI attributed the dampened sentiment primarily to the significant increases in crude oil prices and shipping costs, both exacerbated by the geopolitical tensions in the Middle East.
In response to these external pressures, Lee Sang-ho, head of the FKI’s economic division, urged government intervention. “To prevent external shocks from eroding the competitiveness of Korean companies, the government should support price stability for petroleum products, including naphtha and oil and gas, while swiftly preparing supplementary measures to minimize disruptions in raw material supplies and production,” Lee stated, emphasizing the need for proactive policies to safeguard the nation’s industrial base.
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